Economist Dr. Mohd Afzanizam Abdul Rashid believes Malaysia should pursue both bilateral and multilateral free trade agreements (FTAs) to strengthen its economic resilience amidst global trade shifts caused by the US's import tariff hikes. He also emphasizes the importance of domestic capacity building and trade diversification.
Malaysia must take a proactive stance to navigate the evolving global trade landscape, which is being impacted by the US's import tariff hikes, according to an economist. Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid highlighted the importance of Malaysia expanding its free trade agreements (FTAs) by pursuing both bilateral and multilateral trade deals to bolster economic resilience .
He emphasized that engaging with trade blocs like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) will ensure continued access to diverse markets. Dr. Mohd Afzanizam stressed the need for Malaysia to strengthen its domestic capacity through investments in human capital development, particularly in education, healthcare, and infrastructure. These investments are crucial for enhancing Malaysia's competitiveness. A well-educated workforce and robust infrastructure will attract foreign investment and promote economic diversification, he noted. Furthermore, he recommended that Malaysia diversify its trade portfolio by venturing into value-added industries, digital economy initiatives, and green energy investments. This will reduce reliance on traditional manufacturing exports and create new growth opportunities in high-tech and sustainable sectors. Recently, US President Donald Trump announced a 25% import tariff on goods from Canada and Mexico, along with a 10% tariff on Chinese imports. However, Trump has agreed to postpone the tariff imposition on goods from Mexico and Canada for 30 days. Meanwhile, Dr. Mohd Afzanizam expects the US dollar-ringgit exchange rate to fluctuate between RM4.40 and RM4.50, with immediate support at RM4.45 and resistance at RM4.36. He highlighted that the US Federal Reserve's response to these developments will significantly influence future monetary policy. The upcoming Federal Open Market Committee meeting scheduled for March 18-19 will provide updated economic forecasts, and market volatility is likely to increase leading up to this meeting
Free Trade Agreements Trade Diversification Economic Resilience US Tariffs Malaysia Economy
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